Employee shareholders of global financial services firm FNZ have filed a US$4.6-billion class action against their employer and 17 of its current and former directors in the New Zealand High Court.
The employee shareholders allege that directors transferred wealth away from employees to the institutional and private equity investors the directors represent by issuing preferred shares and warrants at non-commercial terms.
Hundreds of Class B employee shareholders have joined the class action, which could expand to more employees if the court approves it.
FNZ has said it considers the claim “entirely without merit.” It and its co-defendants’ counsel tried to halt the court proceedings, lodging seven separate memoranda and two affidavits — all of which the judge rejected on Aug. 27, clearing the way for the case to be heard.
“This is not a game of technicalities,” employee shareholders said in a statement afterward, “it is a case about directors’ duties, oppressive conduct and a deliberate transfer of value. A snowstorm of memoranda is not a defence; it is an attempt to stop the merits being heard.”
In a statement of claim filed July 2025, the employee shareholders alleged that FNZ allowed institutional investors to subscribe to FNZ shares at a discount of roughly 50% of fair market value across three capital raises via transactions with preferred shares in April 2024, September 2024 and April 2025.
FNZ’s institutional investors include Canada’s Caisse de dépôt et placement du Québec (CDPQ) and CPP Investments.
In addition, the terms of the transaction “prejudiced the plaintiffs by imposing an undue financial burden on FNZ, which diluted the value of [the plaintiff’s] interests in FNZ,” employee shareholders said in the statement.
The transactions subordinated the plaintiffs’ interests in FNZ relative to institutional shareholders, whose preferred shares entitle them to priority in payment. Class B shareholders won’t receive any value for their shares until institutional shareholders have first received the full redemption amount for their shares, according to the statement of claim.
Employee shareholders also alleged that warrants issued to institutional investors during the September 2024 and April 2025 transactions and exercised on May 2025 by CDPQ and two other institutional investors diluted Class B shares by 10.8%.
Prior to April 2024, Class B shares made up 23%, or US$4.6 billion, of the US$20-billion company.
“The … transactions were to the substantial benefit of the institutional shareholders, because they resulted in a transfer of wealth from Class A and Class B shareholders to those institutional shareholders,” the employee shareholders claimed in the court filing.
FNZ did not respond directly to emailed questions, but reiterated a statement made in July, rejecting the claim as meritless.
“We are confident that our directors have at all times acted in the best interests of the company, its clients, employees and all stakeholders,” it said. “The investments by FNZ’s institutional shareholders reflect a strong commitment to the company’s long-term growth and success, an outcome that can only be in the best interests of all its stakeholders.”